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M.D.Fla.: Defendant Does Not Moot FLSA Case By Tender of Unpaid Wages/Liquidated Damages, Absent Payment of Reasonable Attorneys Fees and Costs
Klinger v. Phil Mook Enterprises
Following the recent 11th Circuit decision Dionne v. Floormasters, the blogosphere has been abuzz with articles positing that the decision gave employers the green light to engage in wholesale wage theft and take a wait and see approach with regard to paying employees their wages. Several management-side attorneys have even gone as far as to suggest that a thieving employer could tender payment of wages/liquidated damages alone on the courthouse steps on the eve of a jury verdict and simply avoid paying mandatory fees and costs under 216(b). Not so, holds Judge James D. Whittemore, in the first case on the issue post-Dionne.
In Klinger v. Phil Mook Enterprises, the defendants-employers attempted just this strategy. After Klinger filed a lawsuit seeking the payment of her unpaid wages and liquidated damages, her former employers tendered what it deemed “full payment” of her unpaid wages and liquidated damages. However, it denied liability and refused to pay reasonable attorneys fees and costs. Instead, it filed a Motion to Dismiss, asserting that the case was now moot. The Court rejected the defendants’ contention that the case was moot absent payment of attorneys fees and costs and denied defendants’ motion.
Significantly, the Court noted:
“Defendants’ mere tender of payment does not provide Plaintiff with all the relief she seeks and would be entitled to as a prevailing party in this action, to wit: an enforceable judgment, attorney’s fees, and costs. Allowing Defendants to avoid responsibility for Plaintiff’s attorneys fees merely by tendering full payment after litigation has commenced would run counter to the FLSA’s goal of fully compensating the wronged employee. See Silva v. Miller, 307 Fed. App’x 349, 351 (11th Cir. 2009)(“FLSA requires judicial review of the reasonableness of counsel’s legal fees to assure… that counsel is compensated adquately…”. Further, Defendants’ tender effectively circumvents the requirements of Rule 68(a), Fed.R.Civ.P.”
As such, the Court denied the defendants’ motion.
Click Klinger v. Phil Mook Enterprises to read the entire Order.
DISCLAIMER: It is not this author’s assertion that the defendants in this particular case engaged in willful wage theft. Absent further research into the facts giving rise to the underlying claim, the author makes no representations whatsoever as to the specific facts of this case. Instead, this post is a commentary on the procedural history of the case once filed.
11th Cir.: Issue Of Fact Precludes Finding “Manager” Subject To Executive Exemption; Summary Judgment Reversed
Barreto v. Davie Marketplace, LLC
This FLSA overtime case was before the Court on Plaintiff’s appeal from an Order awarding Defendant summary judgment based on a finding that Plaintiff, a”manager” of Defendant’s produce department, was subject to the FLSA’s executive exemption. Reviewing the evidence de novo, the Eleventh Circuit held that the Court below erred and reversed. The record, taken in the light most favorable to Plaintiff, the non-moving party, could support a finding that Plaintiff was not subject to the executive exemption.
“Barreto claims that although his title was that of “manager” and he admittedly performed some managerial-type tasks, his deposition testimony, considered in the light most favorable to him, creates a genuine dispute as to whether management was his primary duty. We agree. The parties agree that Barreto performed the managerial tasks of ordering produce, pricing produce, and scheduling and directing produce department employees; however, it is also undisputed that Barreto spent more than 50% of his time performing tasks identical to those performed by the hourly, non-exempt employees. Indeed, Barreto testified that, due to management’s under-staffing of the department, he was required to perform non-exempt work for such a large percentage of his time that he had no time to fulfill some of the managerial responsibilities he had been nominally given, i.e., to supervise other employees and to purchase the least expensive produce. He also testified that the four other non-exempt employees did not require his supervision, as they already “knew what the job was.” This evidence suggests that Barreto’s non-management responsibilities were more important to the operation of the store than his few managerial duties. Cf. Diaz v. Team Oney, Inc., 291 Fed. Appx. 947 (11th Cir.2008) (rejecting plaintiff’s claim that management was not his “prime responsibility” where the record was clear that “his managerial duties-as the highest ranking employee on duty during the majority of his shifts, in which he supervised the drivers, counterpersons, and cooks, apportioned work, made deposits, filled out required forms, interviewed prospective employees, and engaged in local restaurant marketing-were significantly more important to the operation of the restaurant than his non-managerial tasks”).
Barreto also presented evidence that his discretion in performing his managerial tasks was limited and his work was subject to supervision. Specifically, Barreto testified that he was required to order the cheapest produce available from a list of vendors pre-selected by management, to fix the pricing of the produce by increasing the wholesale prices according to a set scale given to him by management, and to order produce only as needed to restock preexisting supplies. He testified that he was told at the managers’ meeting how many employees he needed to schedule for each shift and how many hours the employees would work. Barreto also testified that when he asked management to hire one or two more employees for his understaffed department, management denied his request and instructed him to cut the hours of the remaining hourly employees from 40 to 30 hours per week. This testimony, considered in the light most favorable to Barreto, contradicts Dhawan’s conclusory affidavit statements that Barreto was given “wide latitude” in managing his department and that he was responsible for using “his judgment” to accomplish certain business goals. As such, Barreto’s testimony creates a genuine issue of fact regarding the extent of Barreto’s discretionary powers and relative freedom from direct supervision while performing his identified managerial tasks, i.e., ordering produce, setting prices, and setting the work schedule for non-exempt employees.
In summary, Barreto’s sworn testimony suggests that Barreto spent the majority of his time performing non-management duties; the management duties he did perform were less important to his position than the other types of duties he performed; and Barreto infrequently exercised his discretion and was subject to direct supervision. Accordingly, even though the evidence suggests that Barreto’s wages were significantly greater than the wages paid to the non-exempt employees in the produce department, we conclude that a reasonable factfinder could find that Barreto’s managerial tasks did not constitute his “primary duties” under the balancing test set forth in the Regulations. See Morgan, 551 F.3d at 1280-81 (holding that store managers were not exempt executives where evidence showed that they “spent most of their time performing manual, not managerial, tasks, that corporate manuals micro-managed store managers’ performance of those tasks, that the 380 district managers closely supervised their store managers, and that store managers had little discretion or freedom from supervision”).
Based solely on Barreto’s deposition, the district court also found that the evidence established that Barreto “customarily and regularly directed the work of two or more employees” and that his recommendations in hiring, firing or the advancement of employees were given “particular weight.” Accordingly, the court found Davie Marketplace met the third and fourth prongs of the executive exemption test as a matter of law. Specifically, the district court noted that Barreto admitted that “he told employees who worked in the produce department their schedules and place[d] them on either the morning shift or afternoon shift,” that “he would assign jobs to the employees to take merchandise outside, and had them rotate bad produce and refill missing produce,” and that “none of [the other employees] were experienced.” The district court also noted that Barreto admitted that he had recommended that an employee be terminated for eating “very expensive fruit” and that the employee had subsequently been fired. Furthermore, although Barreto made no recommendations regarding hiring or advancement of employees, the district court found that “it is unlikely that evaluations and recommendations of advancement of employees would be made” in the five months Barreto worked for Davie Marketplace. Therefore, although Dhawan’s affidavit did not comment upon Barreto’s authority to direct other employees or upon the weight given to his hiring or firing recommendations, the district court found that Barreto’s deposition testimony alone established that the third and fourth prongs of the executive exemption had been met as a matter of law.
We conclude, however, that Barreto’s deposition testimony, when read in its entirety, does not support the district court’s conclusion. First, regarding the third prong, the Regulations define “two or more other employees” as either two full-time workers or their equivalent. 29 C.F.R. § 541.104(a). As to equivalency, “[o]ne full-time and two half-time employees, for example, are equivalent to two full-time employees. Four half-time employees are also equivalent.” Id.; Morgan, 551 F.3d at 1274. In his deposition, Barreto testified that the produce department consisted of five employees, including himself, during his first week of employment, but that after the first week, “two of them were reduced” and that ultimately, there were “three less” employees in the department. Barreto also testified that after the first week, there were “three [employees in the produce department] in the morning and one in the afternoon.” Considering this testimony in the light most favorable to Barreto, after his first week on the job, Barreto supervised two half-time employees in the morning and was by himself in the department in the afternoon. Davie Marketplace offers no evidence refuting this testimony. Accordingly, we conclude that Davie Marketplace has not satisfied its burden of proving that Barreto regularly directed the work of two or more full-time employees.
Regarding the fourth prong, we disagree that evidence of one employment recommendation that was followed is sufficient to establish as a matter of law that Barreto’s recommendations regarding hiring and firing were given a “particular weight.” The Regulations explain that “[t]o determine whether an employee’s suggestions and recommendations are given ‘particular weight,’ factors to be considered include, but are not limited to, whether it is part of the employee’s job duties to make such suggestions and recommendations; the frequency with which such suggestions and recommendations are made or requested; and the frequency with which the employee’s suggestions and recommendations are relied upon.” 29 C.F.R. § 541.105. Here, Barreto’s testimony established that, in one instance, his recommendation to fire an employee for a serious infraction-stealing-was followed; however, his testimony also showed that in another instance, he recommended hiring additional employees and this advice was not heeded. Indeed, after he recommended that additional employees be hired, Barreto was directed instead to cut the hours of his remaining employees. Furthermore, Barreto stated that he did not evaluate the employees in his department and it is uncontested that he did not interview candidates or make any decisions regarding the hiring or advancement of other employees. As such, the evidence in the record creates a genuine issue of fact as to whether Barreto’s employment recommendations were given “particular weight.”
Viewing the evidence in the light most favorable to Barreto, there are questions of fact as to whether his “primary duty” consisted of management, whether he regularly directed the work of two or more full-time employees, and whether his recommendations in hiring, firing, or advancement of employees were given particular weight. Summary judgment based on the executive exemption is appropriate only where the four prongs of the “executive exemption” test are met as a matter of law; it is not the appropriate disposition where, as here, there remain issues of fact regarding three of the four elements. Accordingly, we vacate the entry of summary judgment and remand this matter to the district court.”